As investors continued to exercise caution in anticipation of the US Federal Reserve’s policy decision, gold saw a slight decline of 0.03%, closing at Rs 143,063. Market participants largely anticipate that the Fed will maintain the current interest rates this week, although the CME FedWatch Tool suggests a nearly 80% likelihood of a rate increase in September. Sentiment was also shaped by the reduction of geopolitical tensions following the United States’ decision to pause its military campaign, coupled with Iran’s indication that it would abstain from further attacks, contingent upon the US maintaining its pause. The decline in crude oil prices following these developments has alleviated inflation concerns, thereby curtailing safe-haven demand for gold.
However, the downside remains constrained due to ongoing uncertainty regarding the future trajectory of interest rates. On the fundamental front, CFTC data indicated that COMEX gold speculators augmented their net long positions by 4,438 contracts to reach 123,586 during the week ending 21 July, signifying sustained institutional interest. Meanwhile, China’s net gold imports through Hong Kong experienced a month-on-month decline of over 5%, falling to 50.679 metric tonnes in June from 53.674 metric tonnes in May.
Physical demand exhibited a varied landscape across prominent Asian markets. In India, gold discounts have expanded to US$56 per ounce, marking the highest level in seven weeks, as elevated prices have deterred buyers. In contrast, Chinese physical premiums have risen to US$3–6 per ounce, reflecting an increase in domestic demand. During June, gold holdings in London vaults increased by 0.77%, reaching a total of 9,464 tonnes. This amount corresponds to roughly 757,145 gold bars, with a valuation of US$1.2 trillion.
Gold is currently experiencing long liquidation, as evidenced by a 10.12% decrease in open interest to 4,424 lots, alongside a slight decline in price. Immediate support is positioned at Rs 142,520, with subsequent support at Rs 141,975, whereas resistance is identified at Rs 143,920. A sustained move above this level could extend gains towards Rs 144,775, whereas failure to hold support may invite additional profit booking.